\section{Conclusions and Recommendations}
\label{sec:ConclusionsandRecommendations}

I have shown that small insurers are less efficient than large insurers due to higher variation in their Population Loss Ratio Estimates. Capitation forces clinically efficient health care providers to become inefficient insurers and inefficient clinicians because risk assuming health care providers must cut $PI$'s benefits, even when their capitation payments are adequate for the population. Capitation increases the financial risks of operating health care facilities, disproportionately benefits risk transferors, harms providers and patients, and forces our health care (finance) systems to become less, not more, efficient.

Capitation only works in very inefficient health care (finance) systems when providers can avoid cutting medically necessary and appropriate care, because most providers are overpaid (See Section~\ref{sec:RiskAdjustedPremiums}). Capitation risk assuming health care providers the sizes of $D$ and $E$, cannot possibly maintain service quality and quantity unless $PI$ pays them more than 90\% of its Earned Premiums, but $PI$ cannot pay out more than 90\% of its Earned Premiums without becoming insolvent. 

The implications are stark: Capitation cannot steer our inefficient health care (finance) system toward efficiency because providers who were operating efficiently before accepting capitation must medically necessary and appropriate care. Capitate providers either cut the quality and/or quantity of health care services they provide or fail. Capitated health care providers have been failing financially for four decades and capitation advocates still ignore the evidence that capitation does not work.

Capitation steers health care (finance) systems from inefficient states in which patients receive medically necessary and appropriate care to inefficient states in which some, if not all patients, do not receive medically necessary and appropriate care.

To improve health care (finance) system effectiveness and efficiency we must identify and eliminate inefficient insurance operations, beginning with risk assuming health care providers, then reduce the numbers of our smallest, most inefficient health insurers. $NHI$ is the most efficient insurer possible, but 30 - 40 large, efficient $B$s, can offer higher benefits than $PI$, need less Surplus, would better protect health providers from financial risk. These efficient insurer Bs can earn reasonable and sustainable profits, avoid operating losses, and avoid insolvency with probabilities close to those of $NHI$. Increased insurer efficiency, not capitation, is the path toward more efficient health care (finance) systems.
